,,ii  #aac? ,,congress  #b;d ,session   
,s4 #bccj  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,may #ac1 #bjad,mr4    
,*ambliss introduc$ ! foll[+ bill2 :i* 0
 read twice & ref]r$ to ! ,committee on 
,agriculture1 ,nutrition1 & ,=e/ry  ,a  
,,bill  ,to am5d ! ,commodity ,ex*ange  
,act to improve futures & swaps trad+1 &
 = o!r purposes4  #a4 ,%ort title ,?is  
,act may be cit$ z ! ,end-,us]          
,protection ,act ( #bjad4  #b4          
,def9itions  7a7 ,9 g5]al ,section #a;a 
( ! ,commodity ,ex*ange ,act 7#g        
,u4,s4,c4 #a;a7 is am5d$-- 7#a7 by      
r$esignat+ p>agraphs 7#h7 ?r\gh 7#ea7 z 
p>agraphs 7#i7 ?r\gh 7#eb71             
respectively2  7#b7 by ins]t+ aft]      
p>agraph 7#g7 ! foll[+3  7#h7 ,comm]cial
 m>ket p>ticipant ,! t]m comm]cial m>ket
 p>ticipant means any produc]1          
processor1 m]*ant1 or comm]cial us] ( an
 exempt or agricultural commodity1 or ! 
products or by-products ( an exempt or  
agricultural commodity4  2  7#c7 9      
subp>agraph 7,b7 ( p>agraph 7#dh7 7z s  

r$esignat$71 by /rik+ clause 7ii7 &     
ins]t+ ! foll[+3  7ii7 any pur*ase or   
sale ( a nonf9ancial commodity or       
security = def]r$ %ipm5t or deliv]y1 s  
long z ! transaction is int5d$ to be    
physically settl$1 includ+ any /&-alone 
or emb$d$ option = :i* ex]cise w\ld     
result 9 a physical deliv]y obligation2 
2 &  7#d7 9 p>agraph 7#ej7 7z r$esignat$
 by p>agraph 7#a771 by /rik+ subp>agraph
 7,d7 & ins]t+ ! foll[+3  7,d7 ,de      
m9imis exception  7i7 ,9 g5]al ,!       
,commission %all exempt f designation z 
a swap deal] an entity t engages 9 a de 
m9imis quantity ( swap deal+ 7:i* %all n
 be less ?an #h1jjj1jjj1jjj7 9          
connection ) transactions ) or on behalf
 ( its cu/om]s4  7ii7 ,regulations ,!   
,commission %all promulgate regulations 
to e/abli% ! factors to be us$ 9 a      
det]m9ation "u clause 7i7 to exempt1    
includ+ any monet>y or o!r levels       
e/abli%$ by ! ,commission1 & ^? levels  
%all only be am5d$ or *ang$ ?r\gh an    
affirmative action ( ! ,commission      

und]tak5 by rule or regulation4  4  7b7 
,f9ancial entity ,section               
#b7;h77#g77;,c7 ( ! ,commodity ,ex*ange 
,act 7#g ,u4,s4,c4 #b7;h77#g77;,c77 is  
am5d$-- 7#a7 9 clause 7iii7-- 7,a7 by   
/rik+ an entity ^: & ins]t+ ! foll[+3   
8an entity--  7,i7 ^:  2  7,b7 by /rik+ 
! p]iod at ! end & ins]t+ a semicolon2 &
  7,c7 by add+ at ! end ! foll[+3       
7,,ii7 t is-- 7aa7 a comm]cial m>ket    
p>ticipant2  7bb7 includ$ 9 clause      
7i77,,viii72 &  7cc7 n sup]vis$ by a    
prud5tial regulator2 or  7,,iii7 t is   
includ$ 9 clause 7i77,,viii7 because--  
7aa7 ! entity regul>ly ent]s into =eign 
ex*ange or d]ivatives transactions on   
behalf (1 or to h$ge or mitigate1 :e!r  
directly or indirectly1 ! comm]cial risk
 ( #a or m entities )9 ! same comm]cial 
ent]prise z ! entity2 or  7bb7 ( ! mak+ 
( loans to #a or m entities )9 ! same   
comm]cial ent]prise z ! entity4  2 &    
7#b7 by add+ at ! end ! foll[+3  7iv7   
,same comm]cial ent]prise ,= purposes ( 
clause 7iii77,,iii71 an entity %all be  

consid]$ to be )9 ! same comm]cial      
ent]prise z ano!r entity if-- 7,i7 #a ( 
! entities owns1 directly or indirectly1
 at lea/ a majority own]%ip int]e/ 9 !  
o!r entity & reports its f9ancial       
/atem5ts on a consolidat$ basis & !     
consolidat$ f9ancial /atem5ts include ! 
f9ancial results ( bo? entities2 or     
7,,ii7 a ?ird p>ty owns at lea/ a       
majority own]%ip int]e/ 9 bo? entities &
 reports its f9ancial /atem5ts on a     
consolidat$ basis & ! f9ancial /atem5ts 
( ! ?ird p>ty include ! f9ancial results
 ( bo? entities4  7v7 ,pr$om9antly      
engag$  7,i7 ,9 g5]al ,n lat] ?an #ij   
days aft] ! date ( enactm5t ( ?is       
clause1 ! ,commission %all promulgate   
regulations def9+ ! t]m pr$om9antly     
engag$ = purposes ( clause 7i77,,viii74 
7,,ii7 ,m9imum rev5ues ,! regulations   
%all provide t an entity %all n be      
consid]$ to be pr$om9antly engag$ 9     
activities t are 9 ! bus9ess ( bank+ or 
f9ancial 9 nature if ! consolidat$      
rev5ues ( ! entity d]iv$ f ! activities 

con/itute less ?an a p]c5tage 7z        
specifi$ by ! ,commission 9 !           
regulations7 ( ! total consolidat$      
rev5ues ( ! entity4  7,,iii7 ,rev5ues f 
bank+ or f9ancial activities ,9 det]m9+ 
! p]c5tage ( ! rev5ues ( an entity t are
 d]iv$ f activities t are 9 ! bus9ess ( 
bank+ or f9ancial 9 nature1 !           
regulations %all exclude all rev5ues t  
are or result f =eign ex*ange or        
d]ivatives transactions us$ to h$ge or  
mitigate comm]cial risk 7z def9$ by !   
,commission 9 ! regulations74  4  #c4   
,report+ ( illiquid swaps s z to n      
disadvantage c]ta9 non-f9ancial end us]s
 ,section #b7;a77#ac7 ( ! ,commodity    
,ex*ange ,act 7#g ,u4,s4,c4 #b7;a77#ac77
 is am5d$--  7#a7 9 subp>agraph 7,c71 by
 /rik+ ,! ,commission & ins]t+ ,except z
 provid$ 9 subp>agraph 7,d71 !          
,commission2  7#b7 by r$esignat+        
subp>agraphs 7,d7 ?r\gh 7,g7 z          
subp>agraphs 7,e7 ?r\gh 7,h71           
respectively2 &  7#c7 by ins]t+ aft]    
subp>agraph 7,c7 ! foll[+3  7,d7        

,requirem5ts = swap transactions 9      
illiquid m>kets  7i7 ,def9ition (       
illiquid m>kets ,9 ?is subp>agraph1 !   
t]m illiquid m>kets means any m>ket 9   
:i* ! volume & frequ5cy ( trad+ 9 swaps 
is at su* a level z to all[             
id5tification ( individual m>ket        
p>ticipants4  7ii7 ,requirem5ts ,not)/&+
 subp>agraph 7,c71 ! ,commission %all-- 
7,i7 provide by rule = ! public report+ 
( swap transactions1 includ+ price &    
volume data1 9 illiquid m>kets t are n  
cle>$ & ent]$ into by a nonf9ancial     
entity t is h$g+ or mitigat+ comm]cial  
risk 9 accordance ) subsection          
7h77#g77;,a72 &  7,,ii7 ensure t ! swap 
transaction in=mation describ$ 9        
subclause 7,i7 is available to ! public 
n soon] ?an #cj days aft] ! swap        
transaction has be5 execut$ or at su*   
lat] date z ! ,commission det]m9es      
appropriate to protect ! id5tity (      
p>ticipants & positions 9 illiquid      
m>kets & to prev5t ! elim9ation or      
r$uction ( m>ket liquidity4  4  #d4     

,treatm5t ( affiliates ,section         
#b7;h77#g77;,d77i7 ( ! ,commodity       
,ex*ange ,act 7#g ,u4,s4,c4             
#b7;h77#g77;,d77i77 is am5d$-- 7#a7 by  
/rik+ ,an affiliate & ins]t+ ,a p]son t 
is a f9ancial entity & is an affiliate2 
7#b7 by /rik+ 7includ+ affiliate        
entities pr$om9antly engag$ 9 provid+   
f9anc+ = ! pur*ase ( ! m]*&ise or       
manufactur$ goods ( ! p]son72 &  7#c7 by
 /rik+ & z an ag5t4  #e4 ,applicability 
to bona fide h$ge transactions or       
positions ,section #d;a7c7 ( !          
,commodity ,ex*ange ,act 7#g ,u4,s4,c4  
#f;a7c77 is am5d$-- 7#a7 9 ! second     
s5t5ce ( p>agraph 7#a71 by /rik+ into ! 
future = :i* & ins]t+ 9 ! future1 to be 
det]m9$ by ! ,commission1 = :i* ei!r an 
appropriate swap is available or2 &     
7#b7 9 p>agraph 7#b7-- 7,a7 9 ! matt]   
prec$+ subp>agraph 7,a71 by /rik+       
subsection 7a77#b7 & all t foll[s ?r\gh 
position t-- & ins]t+ p>agraphs 7#b7 &  
7#e7 ( subsection 7a7 = swaps1 contracts
 ( sale = future deliv]y1 or options on 

! contracts or commodities1 a bona fide 
h$g+ transaction or position is a       
transaction or position t--2 &  7,b7 9  
subp>agraph 7,a77ii71 by /rik+ ( risks &
 ins]t+ or managem5t ( curr5t or        
anticipat$ risks2 &  7#c7 by add+ at !  
end ! foll[+3  7#c7 ,commission         
def9ition ,! ,commission may fur!r      
def9e1 by rule or regulation1 :at       
con/itutes a bona fide h$g+ transaction 
or position s long z ! rule or          
regulation is consi/5t ) ! requirem5ts (
 subp>agraphs 7,a7 & 7,b7 ( p>agraph    
7#b74  4  #f4 ,report+ & recordkeep+    
,section #d;g7f7 ( ! ,commodity ,ex*ange
 ,act 7#g ,u4,s4,c4 #f;g7f77 is am5d$-- 
7#a7 by /rik+ 7f7 ,no?+ conta9$ 9 ?is   
section & ins]t+ ! foll[+3  7f7         
,au?ority ( ,commission ,to make sep>ate
 det]m9ations unimpair$  7#a7 ,9 g5]al  
,except z provid$ 9 p>agraph 7#b71 no?+ 
9 ?is section  2 &  7#b7 by add+ at !   
end ! foll[+3  7#b7 ,exception ,if !    
,commission imposes any requirem5t "u   
?is section on any p]son t is n regi/]$1

 or requir$ to be regi/]$1 ) !          
,commission 9 any capacity1 t p]son %all
 satisfy ! requirem5ts ( any rule1 ord]1
 or regulation "u ?is section by ma9ta9+
 a writt5 record ( ea* ca% or =w>d      
transaction relat$ to a reportable or   
h$g+ commodity int]e/ transaction1      
futures contract1 option on a futures   
contract1 or swap4  7#c7 ,suffici5cy ,a 
writt5 record describ$ 9 p>agraph 7#b7  
%all be suffici5t if ! writt5 record--  
7,a7 memorializes ! f9al agreem5t betwe5
 ! p>ties1 includ+ ! mat]ial economic   
t]ms ( ! transaction2 &  7,b7 is        
id5tifiable & se>*able by transaction4  
4  #g4 ,m>g9 requirem5ts  7a7 ,commodity
 ,ex*ange ,act am5dm5t ,section #ds7e7 (
 ! ,commodity ,ex*ange ,act 7#g         
,u4,s4,c4 #fs7e77 is am5d$ by add+ at ! 
end ! foll[+3  7#d7 ,applicability )    
respect to c\nt]p>ties ,! requirem5ts ( 
p>agraphs 7#b77;,a77ii7 & 7#b77;,b77ii71
 includ+ ! initial & v>iation m>g9      
requirem5ts impos$ by rules adopt$      
pursuant to p>agraphs 7#b77;,a77ii7 &   

7#b77;,b77ii71 %all n apply to a swap 9 
:i* a c\nt]p>ty qualifies = an exception
 "u section #b7;h77#g77;,a7 or          
#b7;h77#g77;,d71 or an exemption issu$  
"u section #d7;c77#a7 f ! requirem5ts ( 
section #b7;h77#a77;,a7 = coop]ative    
entities z def9$ 9 t exemption4  4  7b7 
,securities ,ex*ange ,act am5dm5t       
,section #ae;,f7e7 ( ! ,securities      
,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4    
#gho-#aj7;e77 is am5d$ by add+ at ! end 
! foll[+3  7#d7 ,applicability ) respect
 to c\nt]p>ties ,! requirem5ts (        
p>agraphs 7#b77;,a77ii7 & 7#b77;,b77ii7 
%all n apply to a security-bas$ swap 9  
:i* a c\nt]p>ty qualifies = an exception
 "u section #c;,c7g77#a7 or satisfies ! 
crit]ia 9 section #c;,c7g77#d74  4  7c7 
,implem5tation ,! am5dm5ts made by ?is  
section to ! ,commodity ,ex*ange ,act   
7#g ,u4,s4,c4 #a et seq47 %all be       
implem5t$-- 7#a7 )\t reg>d to-- 7,a7    
*apt] #ce ( title #dd1 ,unit$ ,/ates    
,code2 &  7,b7 ! notice & comm5t        
provisions ( section #eec ( title #e1   

,unit$ ,/ates ,code2  7#b7 ?r\gh !      
promulgation ( an int]im f9al rule1     
pursuant to :i* public comm5t is s\ght  
be=e a f9al rule is issu$2 &  7#c7 su* t
 p>agraph 7#a7 %all apply solely to     
*anges to rules & regulations1 or       
propos$ rules & regulations1 t are      
limit$ to & directly a consequ5ce ( !   
am5dm5ts4  #h4 ,analysis by ! ,commodity
 ,futures ,trad+ ,commission ( ! co/s & 
b5efits ( regulations & ord]s ,section  
#ae7;a7 ( ! ,commodity ,ex*ange ,act 7#g
 ,u4,s4,c4 #ai7;a77 is am5d$ by /rik+   
p>agraphs 7#a7 & 7#b7 & ins]t+ ! foll[+3
  7#a7 ,9 g5]al ,be=e promulgat+ a      
regulation "u ?is ,act or issu+ an ord] 
7except z provid$ 9 p>agraph 7#c771 !   
,commission1 act+ ?r\gh ! ,(fice ( !    
,*ief ,economi/1 %all-- 7,a7 /ate a     
ju/ification = ! regulation or ord]2    
7,b7 /ate ! basel9e = ! co/-b5efit      
analysis & expla9 h[ ! regulation or    
ord] measures co/s aga9/ ! basel9e2     
7,c7 assess ! co/s & b5efits1 bo?       
qualitative & quantitative1 ( ! int5d$  

regulation or ord]2  7,d7 measure1 &    
seek to improve1 ! actual results (     
regulatory requirem5ts2 &  7,e7 propose 
or adopt a regulation or ord] only on a 
reason$ det]m9ation t ! b5efits ( !     
int5d$ regulation or ord] ju/ify ! co/s 
( ! int5d$ regulation or ord] 7recogniz+
 t "s b5efits & co/s are difficult to   
quantify74  7#b7 ,consid]ations ,9 mak+ 
a reason$ det]m9ation ( co/s & b5efits  
"u p>agraph 7#a71 ! ,commission %all    
consid]-- 7,a7 ! protection ( m>ket     
p>ticipants & ! public2  7,b7 !         
effici5cy1 competitiv5ess1 & f9ancial   
integrity ( futures & swaps m>kets2     
7,c7 ! impact on m>ket liquidity 9 !    
futures & swaps m>kets2  7,d7 price     
discov]y2  7,e7 s\nd risk managem5t     
practices2  7,f7 ! co/ ( available      
alt]natives to direct regulation2  7,g7 
! degree & nature ( ! risks pos$ by     
v>i\s activities )9 ! scope ( !         
jurisdiction ( ! ,commission2  7,h7     
:e!r1 consi/5t ) obta9+ regulatory      
objectives1 ! regulation or ord] is     

tailor$ to impose ! lea/ burd5 on       
society1 includ+ m>ket p>ticipants1     
individuals1 bus9esses ( diff]+ sizes1 &
 o!r entities 7includ+ small communities
 & gov]nm5tal entities71 tak+ into      
acc\nt1 to ! ext5t practicable1 !       
cumulative co/s ( regulations & ord]s2  
7,i7 :e!r ! regulation or ord] is       
inconsi/5t1 incompatible1 or duplicative
 ( o!r ,f$]al regulations & ord]s2 &    
7,j7 :e!r1 9 *oos+ among alt]native     
regulatory approa*es1 ^? approa*es      
maximize net b5efits 7includ+ pot5tial  
economic1 environm5tal1 & o!r b5efits1  
di/ributive impacts1 & equity74  4